Bank lending to small business erodes among other financing options

Do small businesses need banks anymore?That's the central question posed in this story on Businessweek.com, which references data from the Federal Reserve Bank of Cleveland.The story notes that in June 2008, just months before the collapse of Lehman Brothers prompted credit to seize up, there was $327 billion in small business loans outstanding, according to the Federal Deposit Insurance Corp. By June of this year, the value of small business loans had fallen 12%, to $289 billion.“That's probably a conservative estimate of the toll that the financial crisis took on banks' willingness to make small loans,” according to the story. The website notes that the Cleveland Fed reports that small business lending “fell 78 percent from the summer of 2007 to the end of 2012, accounting for inflation.”Businessweek.com says alternative lenders — including Kabbage and On Deck Capital, peer-to-peer lenders, and firms that specialize in merchant cash advances — “have picked up some of the slack,” though usually at pricier rates than traditional bank loans.Those sources aren't tracked like banks, so “the amount of financing they're responsible for is unclear,” according to the story. But Marc Glazer, CFO of a firm called Business Financial Services, tells Businessweek.com that the market for the merchant cash advances and term loans his firm provides is $50 billion today, up from $5 billion before the financial crisis.The piece concludes that while it's “probably too soon for traditional lenders to worry about small businesses using alternative financing to bypass banks entirely,” the possibility isn't far-fetched — or too far down the road.

Optimism “remained flat in August, dropping 0.1 points from July for a final reading of 94.0.”Not so good, right? True enough, but the NFIB says a look at individual indicators within its survey “reveals incongruent details.”One big one: “Job creation plans leapt to a level not seen since before the recession and sales expectations improved,” with a net 16% of small firms planning to increase the size of their staff, according to the NFIB.But the association noted that in August, small businesses reduced payrolls for the fourth consecutive month, and there was “deterioration in quarter-to-quarter sales and profit trends.”NFIB chief economist Bill Dunkelberg summed it up when he said the August survey “provided us with a rather perplexing set of statistics.”A vital link: A Dayton company called Vocalink, which contracts with businesses and organizations to provide interpretation and translation services, has won a three-year, multimillion-dollar contract with the Cleveland Clinic, according to this story from The Dayton Business Journal.To support that work and go after more business in northern Ohio, the company just opened a Cleveland office and plans to hire as many as 100 linguists, says Amelia Rodriguez, founder and CEO of Vocalink.

The company, founded in 1995, works mostly for health care and legal industries as well as Fortune 500 companies. Across three Ohio offices, it has about 20 full-time employees and 125 linguists, who are Vocalink employees but are used on an as-needed basis in the field, the Dayton paper reports.Beyond the pale:Great Lakes Brewing Co. wins some attention from The Washington Post, which this week looked at the rise of India pale lagers.“They're the rebels, the heretics of the beer world. They don't play by the rules,” The Post says of IPLs.IPLs are “fermented like a lager, then hopped with pungent Pacific Northwest hops well past the point that purists would consider proper for a lager,” the story notes.These hybrid brews “have been around awhile” but are proliferating at craft brewers nationwide, including Cleveland's Great Lakes Brewing.In Great Lakes Brewing's new Silver & Gold IPL, “the IPA definitely overshadows the lager part,” says Lauren Boveington, the brewer's Washington, D.C.-Northern Virginia sales rep. (The brewery released the hybrid brew in June to celebrate its 25th anniversary.)Brewer Luke Purcell fermented it with the same yeast he uses for Great Lakes' Dortmunder Gold; the hop bill includes Calypso, a strain that contributes notes of apple, pear and tea, The Post says.You also can follow me on Twitter for more news about business and Northeast Ohio.

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